A coalition of social enterprise, charity representative bodies and social investment organisations is seeking Government backing for dormant assets to be used to support enterprises in underserved parts of England.
A 12-week consultation on the future use of dormant assets in England is expected to launch this summer. It could see the dormant assets scheme expanded to release an additional £880mn for charities and social enterprises from the insurance, pensions, investment and wealth management, and securities sectors.
The coalition, which includes SEUK, Navca, Power to Change and UnLtd, among others, is backing the Community Enterprise Growth Plan. This focuses on the potential for growing social enterprises across the country, particularly where there has been little investment in the past.
The plan centres on providing increased access to capital, dedicated funding to encourage the growth of trading activity, and tailored business support. As such, it would see dormant assets used in a range of ways to support enterprise and trading activities by VCSEs including:
- Helping smaller charities and social enterprises to access suitable and affordable finance through blending grants and loans in the places and communities most in need of investment.
- Start-up funding for a £50mn Black-led social investment fund as recommended by the recent Adebowale Commission on Social Investment to tackle the current inequity in social investment.
- Supporting a network of nonprofit lenders (Community Development Financial Institutions) that can offer affordable finance to community businesses and small enterprises in areas unable to access mainstream lending.
- Providing tailored business support and incentives for purpose-driven enterprises to grow through trading in the form of match trading initiatives and with learning.
Peter Holbrook CBE, Chief Executive, Social Enterprise UK said:
“This consultation marks a once-in-a-decade opportunity to decide how we use hundreds of millions of pounds to help communities. We must use this precious resource wisely. Ultimately, we know that trading is the only route to lasting transformational change. The Community Enterprise Growth Plan is a smart way to deploy limited funds to support social enterprises in places that need them. I hope that the Government listens to the social enterprise sector and experts in backing this proposal.”
Sarah Gordon, CEO of the Impact Investing Institute said:
“As the UK recovers from the pandemic and faces the cost-of-living crisis, the Community Enterprise Growth plan offers an excellent opportunity for the government to collaborate with the social impact sector to drive private investment towards where it is needed most.
“By targeting support to underserved places and communities, private capital can be deployed to help tackle some of society’s most entrenched social issues, building on the strong foundations laid by local social enterprises.”